Agency Playing Favorites Leads To Bad Faith Termination

Oct.18.2005

While the government has significant discretion under the termination for convenience clause to end a contract, that discretion is not limitless. In Advanced Team Concepts, Inc. v. U.S. (Sept. 28, 2005), the Court of Federal Claims held that a termination was in bad faith and thus a breach of contract permitting lost profits when the reason for the termination was simply to shift the work to the recently departed director of the agency.